A SENIOR banker was sentenced to 14 years’ imprisonment for his involvement in the rate-rigging scandal yesterday.
Banks have paid out billions in fines for rate-rigging but millionaire Tom Hayes is the first individual to be found guilty at trial for rigging the interbank lending rate known as the Libor rate.
The Libor rate is the international benchmark that indicates the interest rate that banks charge when lending to one another.
Rigging this rate allows offenders to make more money or paint a false picture of the bank’s financial situation in order for it to trade.
During his trial Mr Hayes said that Libor rigging was an “industry-wide practice.” Mr Hayes said that in some instances you could get the rate changed simply by offering someone a Mars bar.
The jury found Mr Hayes guilty on all eight charges of conspiracy to defraud.
Professor Andre Spicer of Cass Business School warned the public not to see this as a one-off sentencing of one bad banker and that the case revealed much about “the culture of the City, which created a hot-house for unethical behaviour.”
Commenting on the trial Mr Spicer said that it demonstrated that traders were recruited for the results they could produce and were “bereft of the ability to make ethical judgments.”
Prof Spicer said the trial highlighted “the flawed design of the market in encouraging manipulation” and a “widespread denial of collective misbehaviour within the industry.”
Mr Hayes’s methods were reported in 2009 and he was sacked by Citigroup although he was allowed to keep his £2.2 million bonus.